The ruble appreciated to its strongest level in almost six months as companies sought the local currency to pay taxes and oil, Russia’s biggest export earner, traded near the highest since 2008. Eurobonds climbed, pushing yields to record lows.
The Russian currency gained 0.5 percent to 29.035 per dollar at the close in Moscow, its strongest level since Sept.1 and extending last week’s 2.5 percent advance. The yield on Russia’s $3.5 billion of bonds due 2020 dropped six basis points, or 0.06 percentage point, to 3.991 percent, the lowest since they were sold in April 2010.
Urals crude, Russia’s chief export blend, slid 0.9 percent to $123.91 a barrel, dropping from the strongest level since July 2008 on bets gains were overdone. Russian companies are due to pay about 400 billion rubles ($14 billion) today and tomorrow in mineral extraction and profit tax, according to Nikolay Podguzov, head of fixed-income strategy at VTB Capital in Moscow.
“Oil is only marginally lower,” he said today by e-mail. “The ruble is supported by high oil prices and stronger demand for liquidity.”
The ruble added 0.8 percent to 38.875 per euro, the strongest since July 2010, and 0.7 percent to 33.463 against the central bank’s target euro-dollar basket. Investors pared bets the ruble will weaken, with non-deliverable forwards showing the Russian currency at 29.4093 per dollar in three months, compared with expectations of 29.5295 per dollar yesterday.
Banks sought 5.3 billion rubles of the 120 billion-ruble of one-day funds offered by the central bank in repurchase auctions today. “It looks like banks preferred not to tap the central bank’s refinancing facility, but to sell hard currency into the rally,” Podguzov said.
Bank Rossii manages the ruble within a so-called “floating corridor” against a basket of dollars and euros to limit swings that erode exporters’ competitiveness. The central bank may be buying as much as $250 million a day in foreign currencies to slow the ruble’s advance after it passed through 33.87 against the basket last week, Podguzov said.
Russia’s $2 billion of Eurobonds due 2015 rose, pushing the yield down eight basis points to 2.365 percent, the lowest since they were sold in April 2010. Dollar bonds due in 2015 from OAO Sberbank, Russia’s largest lender, yielded eight basis points less than Feb. 24 at 3.898 percent, while the yield on similar- maturity notes issued by state gas monopoly OAO Gazprom dropped 15 basis points to 3.726 percent, the lowest since August.
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